II. International Jacques Rueff Conference 2017

2nd Jacques Rueff Conference, Monaco
Jacques Rueff (1896-1973) 7th Minister of State of Monaco

“We shall all be the gainers if we can create a world fit for small states to live in.” Friedrich A. von Hayek

Conference Topic:

A Case for Europe’s Small States
in the III. Millennium

The II. International Jacques Rueff Conference is an academic one-day co-operation of CEPROM (Center of Economic Research for Monaco, MC) and ECAEF (European Center of Austrian Economics Foundation, FL).

Academic Director:  Kurt R. Leube, ECAEF
Administrative Director:  Emanuel Falco, CEPROM
Media Contacts: Nicolas Saussier, CEPROM
Conference Date: November 22, 2017
Participation: by invitation only
Location: Musee Oceanographique de Monaco, Principality of Monaco
Conference Languages: English and French; simultaneous translation

Conference Venue:
Opening Dinner at the Hotel Hermitage in the presence of H.S.H. Prince Albert II. for invited guests and speakers only, Nov. 21, 2017. Dinner speaker: Detmar Doering (D)

Conference Program:
09:00-9:30  Registration
09:30-9:45  Welcome by H.S.H. Prince Albert II and H.S.H. Prince Michael of Liechtenstein

Session I:
Historical Reflections and Current Challenges (9:45-12:15)
09:45-10:00  Chair: Detmar Doering (D)

10:00-10:30  ‘Small, Sovereign and Resilient: Lessons from the not-so wild Wild West’ – Terry L. Anderson (USA)
10:30-10:45  Discussion
10:45-11:15  Coffee break
11:15-11:45  ‘Decentralization, Subsidiarity, Secession: States in Knowledge-Based Societies ‘ – Karl Peter Schwarz (A)
11:45-12:00  Discussion

12:00-14:00  Luncheon for speakers and invited guests

Session II:
On the Benefits and Drawbacks for Small States (14:00-15:45)
14:00-14:15  Chair: Peter Fischer (CH)
14:15-14:45  ‘Is Small Still Beautiful? A Swiss Perspective’ – Henrique Schneider (CH)
14:45-15:00  Discussion
15:00-15:30  ‘Limited Places offer Unlimited Thoughts’ – Carlos Gebauer (D)
15:30-15:45  Discussion
15:45-16:15  Coffee break

Session III:
A Case for Small States in the III. Millennium (16:15-18:20)
16:15-16:30  Chair: H.S.H. Prince Michael of Liechtenstein (LI)
16:30-17:00  ‘Reflections on Smallness’ – Antonio Martino (I)
17:00-18:15  Panel discussion: Anderson, Gebauer, Schneider, Schwarz, Martino
18:15-18:20  Farewell Remarks: Kurt R. Leube (A/USA)

18:30-19:30  Farewell Reception at the Palace for speakers and invited guests, hosted by H.S.H. Prince Albert II.

International Vernon Smith Prize 2017 – Call for Papers!

Vernon Smith Prize 2016 Call for Papers
Does Tolerance become a crime when applied to evil? Vernon Smith Prize 2017.

Call for Papers!

The 10th International Vernon Smith Prize for the Advancement of Austrian Economics is an essay competition sponsored and organized by ECAEF European Center of Austrian Economics Foundation, Vaduz (Principality of Liechtenstein). This years’ topic:

Does Tolerance become a Crime when applied to Evil?

|- First Prize EUR 4,000 -|

|- Second Prize EUR 3,000 -|

|- Third Prize EUR 2,000 -|

Advanced by the ‘ends-independent’ market process, free pluralistic societies developed without a shared hierarchy of particular ends. Once we agree on the rules, we need not agree on the goals as markets enable us to disagree peacefully while we pursue our own way. However, to sustain this kind of ’means- but not ‘ends-connected’ society, we must be willing to tolerate differences with others and we have to recognize that our freedom to achieve our ends comes at the cost of allowing others the same, even if we find those ends distasteful.

Does Tolerance become a Crime when applied to Evil?

ECAEF invites papers on this topic which meet the following requirements:

1: Entries may be submitted by individuals of up to 30 years (in 2017).

2: Entries may not exceed 12 pages; 1.5 spacing; left/right margins no less then 1 inch; full bibliography and a 1/2 page summary (abstract) must be included.

3: Entries must be submitted in English in electronic form (PDF) to krl@ecaef.li and must include an abbreviated CV, featuring DoB, education, and current position.

4: Entries must be received on or before November 11, 2017.

5. It is mandatory that all prize winners participate in the award ceremony in Vaduz Prizes are not transferable and will be awarded on the basis of originality, grasp of subject, and the logical consistence of the argument.

Essays will be judged by an international jury and the winners will be invited to present their papers at a special event in Vaduz, Principality of Liechtenstein, in February, 2018. First Prize €4,000 – Second Prize €3,000 – Third Prize €2,000.

Semantic Traps: Politics with Loaded Terms

A Seminar for Scholars, Journalists and Entrepreneurs


«If thought corrupts language, language can also corrupt thought.» George Orwell

Date: June 15, 2017
Location: Unitelma Sapienza Campus, Rome, Italy
Admission: free
Language: simultaneous Italian/English translation, both ways
Literature/Documents: Relevant literature (reader, short essays, …) will be supplied ahead of seminar
Academic Directors:
Francesco Avallone, UTS (I) and Kurt R. Leube, LAF (USA/A)
Program Directors:
Piergiuseppe Morone, UTS (I) and Hans R. Maag, LAF (LI/CH)

An Academic Co-operation between Unitelma Sapienza (Rome, I) and Liechtenstein Academy Foundation – LAF (Vaduz, LI)


«When words lose their meaning, people will lose their liberty.» Confucius, 551-479 BC

The Social Sciences, more then other academic disciplines are regretfully exposed to the fades and superstitions of the fast moving popular Zeitgeist and are thus liable to the periodic introduction of appealing yet empty slogans that undermine well defined terms. As a result, many of them have assumed quite different meanings or, maybe deliberately, have even taken on undertones that suggest something detrimental to what we want to get across.
Have you ever wondered whether the pervasive catchword public interest indeed serves the public’s interest? Or why was global warming replaced with the vacuous phrase climate change that sadly shifted the debate away from scientific methodology where hypotheses can be refuted? Or did you realize that time and again the term justice is substituted with the phrase social justice that not only renders it utterly meaningless. This narcotic phrase also assumed a meaning close to revenge which gravely denigrates the ‘rule of law’. The frequent placing of the simple yet hollow word social in front of commonly used terms produces an almost endless list of corrupting phrases.

The persistent confusion of reality and fiction thus creates politically risky ‘semantic traps’ that not only seriously hamper any political discussion. It has grave implications for democracy, the proper role of government, or for the preservation of our civil rights and individual freedom. As George Orwell observed: “If thought corrupts language, language can also corrupt thought”.

The goal of this one-day conference is not only to explore a wide range of issues where semantics condition policy debates, to examine how terms evolve in ways that completely undermine, and at times even alter the very foundations of a free and democratic society, and to discuss how ‘Semantic Traps’ might be avoided. Put differently, we aim at a better understanding of hollow yet catchy words, trendy slogans and appealing phrases in public policy debates.

However, co-sponsored by Unitelma Sapienza (Rome, I) and the Liechtenstein Academy Foundation (Vaduz, LI) this endeavor serves also as the kick off for an academic partnership between these institutions to offer the innovative online MA course “Understanding How Society Works. An Introduction to the Austrian School of Economics”.

Seminar Program, Thursday, June 15, 2017

08:30 – 09:00  Registration at Unitelma Sapienza Campus, Rome
09:00 – 09:15  Welcome by Francesco Avallone, Rector, Unitelma Sapienza University of Rome, and Hans R. Maag, Director, Liechtenstein Academy
09:15 – 09:30  About the Idea and the Intent of this Conference.
Kurt R. Leube

Session I: On the ‘Public Interest’, the so-called ‘newspeak’ and the Meaning of ‘Green’ (9:30 -11:30)
Chair: Piergiuseppe Morone
09:30-10:00  «Is the ‘Public Interest’ really in the Public’s Interest?»
Carlos Gebauer
10:00-10:10  Discussion
10:10-10:40  «Values and Rights: The Semantic Traps in Worn-out European Newspeak»
Karl Peter Schwarz
10:40-10:50  Discussion
10:50-11:20  «What is the Meaning of Green? The new Standardization Trap in the Bioeconomy»
Knut Blinde
11:20-11:30  Discussion

11:30-11:40  Coffee Break

Session II: Immigration and Political Rhetoric (11:40-13:00)
Chair: Piergiuseppe Morone
11:40-12:10  «Immigration, Migration, Emigration, or Else?»
Maria Grazia Galantino
12:10-12:20  Discussion
12:20-12:50  «Making Populism Mainstream: Political Rhetoric During Campaigns»
Nicolò Conti
12:50-13:00  Discussion

13:00-14:00  Buffet Luncheon for all participants at seminar site

14:00-15:00  Panel (Blind, Conti, Galantino, Schwarz) – Discussion leader: Carlos Gebauer

Populists, demagogues and the French elections

GIS statement by Prince Michael of Liechtenstein

The National Front’s lead in France’s election campaign has once again put the spotlight on populism. “Populism” has become a buzzword that is increasingly used as a negative label meant to discredit non-mainstream movements and kill any substantive discussion about the merits of their proposals.

Such methods are intellectually arrogant. They imply a disrespect for voters’ judgment and therefore contradict the idea of democracy. Populism is, in fact, an ingredient of any functioning democracy, though it needs to be reined in by a system of checks and balances. It is only when populism becomes demagoguery that it turns dangerous.

Such damaging demagoguery can be seen in the discussion about equality. It targets envy and leads to a totalitarian culture. Men are unequal by nature: this is the biggest driver and strength of mankind, while love – man’s most noble characteristic – is also only possible in accepting inequality. Inequality does not mean that we must see others as better or worse, but it does entail an acceptance of the individuality of other people, families and social groups. Since equality is deeply against human nature, a society that denies inequality can only be totalitarian.

‘Undemocratic’ bulwarks

Thomas Piketty, a French economist famous for his book Capital in the Twenty-First Century, claims, in a manner that is rather questionable scientifically, that inequality is the root of most of society’s problems. It is significant that – leaving his field of study, economics – he criticizes the European Parliament for its “inequality” because the votes there are not precisely linked to population size. It is true that a member of parliament from Luxembourg or Malta needs fewer votes to be elected than one from Germany or France, but the smaller member states should be properly represented.
His argument is further undermined when viewed from another perspective. The protection of democratic institutions and the rule of law is important: there must be checks and balances. These include “undemocratic,” well-entrenched institutions designed to withstand the negative forms of populism. Two countries that have maintained a strong democratic culture over a long period of time – the United States and Switzerland – ensure that the smaller and larger members of their federations are represented equally. In the U.S. Senate, Rhode Island’s representation is equal to California’s. A similar system exists in Switzerland, with its cantons.

Such architectures make these countries less prone to the negative consequences of populist excesses. This is also the role of monarchies. A monarchy is much better placed than a political party to withstand short-term turns toward populism and demagoguery.
French surprise?
France, which is proud of its democratic tradition, has a centralist system. The principle of subsidiarity, with strong regional representation and decentralization, is not a decisive factor in avoiding the excesses of a populist majority. Checks and balances are guaranteed by the judicial system, while sometimes the president’s party does not have the majority in parliament and the government is controlled by a different party, a phenomenon called “cohabitation.” Nevertheless, this centralist system can make France vulnerable to populist and even demagogic movements.

This year, the French election campaign is a huge, messy spectacle of populists and demagogues. Most candidates make promises and promote programs that will have damaging long-term consequences. This is not limited to Marine Le Pen’s National Front. Emmanuel Macron, who has been considered the favorite in recent weeks, is making proposals that are attractive on the surface, but are unrealistic and financially unsustainable. As the campaign heads toward the finish line, he has repeated an old nationalist-protectionist mantra, blaming Germany for being too productive and creating imbalances.

But France is always good for a surprise. Republican Francois Fillon still has a chance to win over enough voters, despite the allegations against him. Of all the candidates, his program is the most realistic, and he has the courage to address unpopular issues and big problems that urgently need solving. With Mr. Fillon, France has the chance to show Europe that it is possible to win an election without being a populist or a demagogue …

Read the full GIS statement here ->
Populists, demagogues and the French elections

The day Europe goes bankrupt

by Prince Michael of Liechtenstein

Behavioral scientists have observed that man as a species has developed an ability to ignore threatening or negative information. We tend not to look closely at bank statements showing debt or disturbing results of medical tests. Surprisingly, people with higher IQs are even more prone to this mental displacement than the less gifted. Such behavior could be called the ostrich principle. This does a serious injustice to the ostrich, which as any zoologist will confirm, does not stick its head in the sand when danger looms.

So with apologies to ostriches, we will still use this term to describe the shocking and nearly universal ignorance of the problem of Implicit Pension Debt.

By Implicit Pension Debt (IPD), we understand pension obligations that governments, including regional and local authorities, have incurred toward current and future pensioners. Most tax and accounting codes require companies to report such implicit debts on the liability side of the ledger as obligations. Not so with governments, whose accounting practices would under normal circumstances be considered as falsifying public accounts.
Six European countries have an implied pension debt exceeding 300 percent of GDP

One of the Maastricht Treaty criteria for adherence to the euro stipulates that public debt should not exceed 60 percent of gross domestic product. Anything above that level – and this is borne out by empirical data – is detrimental to sustainable economic development. Unfortunately, official figures already show the average debt-to-GDP ratio in the eurozone hovering close to 90 percent. Germany is also breaking the rules with a ratio of about 70 percent.

Now comes the shocking but consciously or subconsciously suppressed data about implicit pension debt. According to a recent study, six European countries – Austria, Finland, France, Germany, Italy and Poland – have an IPD exceeding 300 percent of gross domestic product. This includes three of the European Union’s four largest economies. Ten more European countries have ratios between 200 and 300 percent.
And the kicker? The data cited above are based on the present value of future pensions as of 2006. More up-to-date figures probably won’t be available until the end of 2017, when Eurostat is supposed to start publishing accrued-to-date pension entitlements statistics in its new European System of National Accounts.

Some of the European Union’s biggest economies could get crushed by pension debt

Back in 2006, two French journalists, Philippe Jaffre and Philippe Ries, published a novel called Le Jour ou la France a fait fallite (“The Day France went Bankrupt”). The book is brilliant in its foresight. It describes how France’s public debt inexorably rises until the day comes when creditors refuse to grant additional loans. The country’s debt is downgraded by the rating agencies and domestic banks, due to their high exposure to government bonds, become insolvent. The French economy stops working as wages go unpaid and the financial system collapses. To restore financing, creditors demand drastic measures. The novel culminates with Sotheby’s moving into the Louvre and auctioning its treasures, including the Mona Lisa.

In hindsight, one can only admire the two authors’ forward-looking realism. What they failed to anticipate, however, was the audacity of the European Central Bank. Through two mechanisms – quantitative easing (particularly the buying of government bonds) and the “target system” credit facilities – monetary policymakers have converted the debt of some high-spender countries into a liability of the entire eurozone.
Delayed collapse
The target system means that the ECB funds trades. For example, an exporter in one country is paid through his central bank. The ECB then gives a credit to this central bank and debits the importing country. The problem, however, is that Germany has now piled up 800 billion euros in target credits with the ECB. It will never be able to recover this sum, as the debtor countries will not be able to cover their debits. Thus, such transactions amount to hidden transfer payments with artificial money. Their effect is to delay financial collapse, at the cost of making the situation even worse.
The issue is no longer when France goes bankrupt, but when Europe does. The level of debt declared in the national accounts is already worrying. With implicit pension liabilities a multiple of that, it appears that a systemic implosion is unavoidable.
Just printing money is not a sustainable solution. A more sensible response would be to reduce the state’s role in the economy and to drastically streamline the regulations and controls that are stifling business. But nobody in power is proposing this, and even if they did, it might already be too late.
National insolvency could be triggered by an incident or accident, which in turn could lead to a European or even global contagion

The ostrich principle is irresponsible because it ignores the possibility of fiscal collapse and its economic, social and political consequences. What would these be?

In free societies with respect for constitutional principles, governments would need to sell off their assets – especially real estate and shares in state-owned companies. The Louvre auction is a dramatic example. But it would also mean a sweeping reorganization of the economy that would leave less room for the state and more for business.
More likely, the ostrich principle will continue to apply. In that case, national insolvency could be triggered by an incident or accident, which in turn could lead to a European or even global contagion.
In this worst-case scenario, political decision makers might decide to take the path of least resistance and confiscate or socialize private wealth. The effect of such autocratic measures would be to destroy prosperity and social cohesion, under the hypocritical banner of equality and justice.
To boost revenue for the profligate public sector, income controls might also be introduced. Europe would proceed – as Friedrich Hayek forecast – on the “road to serfdom.” Thirty years after the fall of the Berlin Wall, we will have arrived back at the economic and social model of East Germany.

Read the original GIS statement here ->
Opinion: The day Europe goes bankrupt

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